✎ India must prioritize domestic production in critical sectors amid global tariff conflicts and policy shifts.

Relevance for Banking, SSC & RBI Grade B exams: Polity & Governance

Former RBI Governor C. Rangarajan has underscored the urgent need for India to rethink its economic policies in light of escalating global conflicts and the growing imposition of tariffs by countries. Speaking at a lecture commemorating 35 years of India’s New Economic Policy, he highlighted that geopolitical tensions and trade barriers are disrupting traditional liberalisation frameworks. Rangarajan emphasized that India must prioritize domestic production in critical sectors such as defence, semiconductor chips, and artificial intelligence (AI) to mitigate external vulnerabilities, even if it means deviating from strict liberalisation norms. This shift, he argued, is essential to safeguard national interests amid an increasingly fragmented global economy, where external shocks rather than domestic weaknesses are driving economic challenges.

For aspirants preparing for Bank PO, IBPS, SBI, RBI Grade B, and SSC exams, Rangarajan’s observations are highly relevant as they reflect the evolving priorities of economic governance in India. The emphasis on self-reliance in strategic sectors aligns with recent government initiatives like the Production-Linked Incentive (PLI) schemes and the push for Atmanirbhar Bharat. Exam questions may probe the balance between liberalisation and protectionism, the role of the RBI in managing external shocks, or the impact of tariffs on inflation and trade deficits. Understanding these dynamics will be crucial for tackling current affairs sections in competitive exams, where questions often link theoretical economic principles to real-world policy shifts.

Source: The Hindu

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